The goods and services tax (GST) will be zero-rated starting June 1, effectively scrapping the consumer tax implemented by the previous government in 2015, the finance ministry has announced.
"Such determination does not include goods and services that are listed in the Goods and Services (Exempt Supplies) Order 2014 which will remain excluded from GST", the ministry said. "At the same time, registered businesses are still subjected to all current regulations", said the Ministry. With this new zero-rated GST, this could mean slightly lower bill cost and price reduction for smartphone, tablets and pretty much all goods and services that are now imposed with the 6% GST.
It also reminded traders that they must ensure the prices of their goods and services comply with the Price Control and Anti-Profiteering Act 2011 at all times.
The ministry's announcement comes nearly a week after the Pakatan Harapan (PH) coalition took over as federal government. The current Pakatan Harapan administration had promised to replace GST with SST so this could be a first step to that direction.
"Whatever excess taxes collected under GST will be refunded", he told reporters at Yayasan Perdana, today.
"What if a business were to continue charging GST beyond June 1?"
Prime Minister Mahathir Mohamad, who pulled off a surprise win in last week's elections, said "the directive has been issued so that we do not collect anymore GST".
Ratings agency Moody's said this week that the removal of GST would be credit negative for Malaysia as it would cut off a significant revenue source for the government.
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